How Much Does a Statutory Audit Cost in the UK?

The published guide to audit costs in the UK suggests that a simple company audit can cost around £15,000 to £22,000 including VAT, and more complex assignments can be far more costly. The above amounts are estimations published by an audit provider and not a national fee tariff or a quotation from Reflex Accounting.

When it comes to costs, their concerns are not limited to how much the audit will cost. Possible questions can include how closely the final amount will correlate with the quote, how long the financial team will be working with the auditing firm, and whether the auditing firm understands the workings of its business. A proper engagement allows all issues regarding duties and payments to be settled clearly.

What do UK businesses pay?

The market research reported by the Financial Reporting Council (FRC) in March 2026 found that the average audit fee for small and medium enterprises (SMEs) was £21,200 in 2024, while for medium enterprises it was £30,900. These amounts are only historical benchmarks that were derived from audit data from 2024 and size thresholds valid before April 2025 and should not be considered as current fee quotations. The following set of examples from the provided data helps illustrate how an audit’s costs can be affected by the scope and complexity of the audit.

These numbers represent estimated values that an audit provider has provided. It is a good starting point on which to base your budget, though solely using turnover amounts to calculate the auditing cost is not enough. You should ask for a proposal based on your company’s reporting practices, accounting data, and the potential risks associated with the audit.

Check whether an audit is required

Determine whether a statutory audit is necessary for your business before setting an audit budget. If a private company meets two or more of the following criteria for accounting periods commencing on or after 6 April 2025, it can be entitled to the small company exemption from audit obligations:

• An annual turnover of no more than £15 million
• Total assets of no more than £7.5 million
• An average of fewer than 50 employees 

These thresholds apply to the small company exemption requirements established by section 477 of the Companies Act 2006. However, the previous limits of £10.2 million turnover and £5.1 million total assets continue to apply before 6 April 2025. 

Apart from the above factors, several additional factors can determine whether an audit is needed. Factors include the group’s status, ability to carry out regulated activities, the articles of association of the company, and valid requests made by shareholders. Specifically, a shareholder or shareholders with the relevant percentage of shares, which is at least 10%, may require an audit if a written request has been made within the statutory limit.

Moreover, the financial year start date is significant since previously established entities need to take the two-year qualification condition and all relevant transitional provisions into consideration. 

It is important not to assume that breaching one limit will lead to a company needing to be audited. Similarly, a subsidiary cannot assume it need not undergo an audit simply because its turnover is below the small company limit; instead, a subsidiary has to stick to certain statutory requirements, including parent company guarantees, consolidated accounts and shareholder agreements.

What increases the audit fee?

Complexity, not just company size

Numerous entities, global activities, mergers, various stock locations, and complicated valuations can increase the quantity of required proof and force the need for specialist advice. Therefore, it is possible for two corporations with similar sales levels to get different audit estimates. 

Incomplete or changing records

Unbalanced accounts, lacking agreements, and changes in the trial balance from time to time can lead to extra queries and work being duplicated. Preparing accurate financial statements and supporting documents before the fieldwork enables the auditor to provide service more effectively.

A first audit

The audit that takes place for the first time usually involves further work as the auditor needs to understand the organisation, its accounting processes, and the processes of reporting. Besides, it is necessary to gather enough evidence regarding the opening balances. Old stock records and unexplained reserves can make the process much more complicated than during an ordinary yearly audit. 

Difficult accounting judgements

Recognition of revenues and impairment, provisions, and going concern analysis require accurate investigation and supporting data from management. If the relevant accounting procedure has not been decided, the auditor should get more data before issuing an audit opinion.

What should the fee cover?

The statutory audit starts with the planning of the audit, analysing risks, collecting and analysing audit evidence, revising the format of the financial statements, and issuing the auditor’s report. The auditor should also present important findings and deficiencies in internal control to the management and all parties responsible for governance. 

Additionally, the statutory audit assures the reliability of the report, but it provides reasonable assurance rather than a guarantee that all errors and frauds will be identified. The statutory audit does not guarantee the effectiveness of all internal controls of management or every organisation. Before you accept the quote, find out whether it includes the following:

• The cost of preparing statutory accounts and other accounting changes
• Corporation Tax calculations and the CT600 return
• Consolidation of the group and other additional reports required by legislation
• Specialist input, expenses and VAT
• The cost of other services connected with missing information or changes in the plans

The preparation of accounts as well as tax compliance must be considered as separate services unless otherwise mentioned in the engagement. Any extra service has to comply with the appropriate requirements governing the independence of the auditor.

Control costs without cutting corners

Set up the requirements for the audit and the relevant timeline as soon as possible. Make sure the bank accounts, accounts receivable, accounts payable, and tax accounts are reconciled, and all the necessary evidence is prepared to confirm the trial balance. One finance manager must be appointed to handle the audit-related questions and clarify any non-standard transactions before the start of the audit. 

When comparing proposals, find out what assumptions have formed the basis of the quoted fee, who will be in charge of the assignment and how the audit provider will handle the approval and payment for additional services. A low quoted fee is of low value if the service scope varies or if different kinds of services are delivered.

Why choose Reflex Accounting?

Reflex Accounting has a competitively priced statutory audit service which benefits from a highly customised pricing strategy. A company’s audit cost can be assessed based on its unique circumstances. Through our external audit service, the company follows the fixed-fee approach, which adds transparency to the audit process.

Reflex Accounting’s audit service has some important features that make it stand out:

• Registered audit capability. Reflex Accounting is registered with ACCA to provide statutory audit services in the UK.
• Experienced leadership. Our auditors have considerable experience in auditing and accounting gained by working for several prestigious auditing firms like KPMG and Grant Thornton.
• Relevant technical knowledge. The audit team has all the required knowledge of financial reporting in accordance with FRS 102 and IFRS, if applicable, as well as group reporting and subsidiary audits.
• Practical delivery. The company’s audit service is based on risk-based planning, an agreed timetable, solid evidence-based requests, and effective communication.
• Useful findings. Many useful recommendations related to financial reporting and control weaknesses are published following the audit.

Prices need to reflect appropriately performed audit work instead of decreasing auditing evidence requirements or issuing an unqualified audit opinion. Moreover, directors must be held accountable for financial statement preparation and business decisions during the audit.

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